‘One-in-six’ American pensioners is a millionaire

A report by financial planning firm United Income shows that the US has never had so many wealthy retirees, with the share of millionaire pensioners almost doubling, and their average wealth soaring by over 100 percent since 1989.

“Most of that surge in wealth has occurred in financial accounts, which means it can be relatively more easily converted into retirement income, if needed,” the company’s analysts say, stating that average wealth among retirees is now $752,000.

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According to the report, current US retirees are healthier, wealthier and living longer than any previous generation. “Among retirees, surging wealth has also not affected income inequality, which remains unchanged from 30 years ago,” the paper says.

The researchers found out that the growth in wealth had contributed to a 42-percent increase in wealth inequality among this older group of the US citizens. However, that is “solely due to the growing difference in investment wealth among retirees rather than the differences in value of housing and other non-financial assets.”

“People have held incomes and spending constant over time,” Matt Fellowes, United Income’s founder and chief executive officer told Bloomberg. “The wealthiest retirees are wealthier but are not spending more, relative to previous generations.”

At the same time, the gap between the wealthy and the ultra-wealthy has expanded. “While the median millionaire increased their wealth between 1989 and 2016 by 12 percent, for instance, the top one-percent of millionaires increased their wealth 110 percent, or from $14.9 million to $31.3 million,” the report claims.

During this same period, the median millionaire’s equity positions rose from 27 percent of their financial account value to 55 percent, while the fortune of the top one percent of millionaires more than doubled, from $14.9 million to $31.3 million with their equity positions swelled from 30 percent to 69 percent.

“It’s clear that the dividends from being an investor are paying off for retirees fortunate enough to have savings and investments,” Fellowes said, as quoted by the agency. “What’s discouraging is that those who are not saving or investing are just getting left progressively farther and farther behind as each successive generation enters retirement.”

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